Search form

You are here

Gigaba: Transformation Is Not Equal To Corruption

The new minister of finance stays on-message, but aides outline where he will part ways with Pravin Gordhan

Thursday 4 May, 2017 - 9:57

Is Finance Minister Malusi Gigaba South Africa's answer to the 39-year-old Emmanuel Macron, the French politician who has swept like a whirlwind through his country?

With a shiny pate and answers only slightly more carefully cut than his suit, the audience cracked up at the question posed to the 45-year old South African finance minister by World Economic Forum (WEF) executive Adrian Monck on Monday night.

An audience of hundreds turned out to hear him speak in the last session on Monday night. The rows were filled with enough CEO's to stock many mahogany rows.

Gigaba filed the standard ANC answer. "Branches of the ANC are the final arbiter," and then he added a telling rider: "It's important for people to get involved in politics while still young. We do need as many young people in politics in Africa than ever before. We need to see that reflected in ranks of political power brokers. Young people have a different take on politics."

In a month since he was foist into office at National Treasury after a midnight reshuffle by President Jacob Zuma, Gibaba has become a powerbroker. An audience of hundreds turned out to hear him speak in the last session on Monday night. The rows were filled with enough CEO's to stock many mahogany rows as well as investors, trade union leaders, fellow cabinet ministers and a significant global and local media contingent.

Gigaba toned down talk of "radical economic transformation" and mentioned the term only in the ninth minute of a 35-minute long talk.

"The inclusive growth narrative must become part of South Africa's DNA," said Gigaba. Inclusive growth is the response of the global economy to trading and economic systems that benefited elites and squeezed workers, peasants and the unemployed.

"You must understand the impatience for speedy change," Gigaba said, who highlighted that Zuma had first raised the idea of economic transformation in 2008, before he took office. But he committed himself to the 2017 Budget and the spending packet. "The budget for 2017 is set. In the medium term expenditure framework we have outlined how we intend to spend. We cannot spend money we don't have. Our spending patterns cannot be out of tune with growth patterns in our economy. We need to act in a prudent and responsible manner."

Earlier in the afternoon, Gigaba met former Finance Minister Pravin Gordhan and the new minister's fiscal stance sounded as if he had exchanged notes with his axed counterpart. What is the difference between Gordhan and the new incumbent since their precepts and policies on fiscal discipline, debt reduction and prudence sound remarkably the same?

An aide outlines three differences: Gigaba will drive transformation more forcefully. He said the R500-billion state procurement budget would be used to aggressively support black industrialists, small and medium-sized businesses as well as black and women owned enterprises.

Spending will increasingly be done in the township and rural economies as he will favour manufacturers over the finance sector, said the aide. Gigaba said township economies needed to move out of the low growth and turnover trap of being dominated by "spaza shops, car washes and hairdressing salons."

He said the office of the chief procurement officer (which is filled by Schalk Human in an acting capacity) should not only monitor compliance with procurement rules but be used politically to ensure transformation.

Another point of difference with Gordhan is how Gigaba views the corruption narrative. The former incumbent and his deputy, Mcebisi Jonas, believed state capture, a heightened form of corruption, is a risk in South Africa.

"The fight against corruption must not become a fight against transformation. We often use corruption and transformation in the same sentence as if bringing black people into the economy equals corruption," he said.

But, Gigaba added that "there is no attempt nor desire to change the role of the Treasury (as a bulwark against corruption)". Rooting out private sector corruption is as important as investigating corruption in the public sector, he said.

HuffPost SA spoke to seven WEF delegates who are nervous of the country's trajectory and view Gordhan's axing as an ominous slide in governance.

Local business people canvassed have accepted Gigaba's assurances of policy certainty and said he is on the right track. Two Treasury officials said he had settled in well and showed deference to the team's expertise.

This article was written by Ferial Haffajee, Editor-at-large for Huffington Post. This article first appeared on Huffington Post.